CenterPoint unveils $65 billion capital spending plan over next 10 years

CenterPoint Energy (CNP) announced a substantial $65 billion capital spending plan from 2026 through 2035, driven by anticipated significant growth in U.S. electricity demand from AI data centers and industrial electrification, particularly in Texas. Concurrently, the utility raised its annual adjusted earnings per share forecast to $1.75-$1.77 and set a 2026 adjusted EPS target of at least the midpoint of $1.89-$1.91, reflecting the strategic investment to meet projected power consumption increases, including data center demand expected to nearly triple in three years.

Analysis

CenterPoint Energy (CNP) has outlined a significant long-term growth strategy, committing to $65 billion in capital expenditures from 2026 through 2035. This investment is directly aimed at capturing the anticipated surge in U.S. electricity consumption, primarily driven by the proliferation of AI data centers and the broader electrification of industries. The company's strategic focus on Texas is particularly notable, as the state is a rapidly expanding hub for energy-intensive sectors. Underscoring the immediate financial benefits of this positioning, CenterPoint has raised its annual adjusted earnings per share (EPS) forecast to a range of $1.75-$1.77, representing a 9% year-over-year increase at the midpoint and aligning with analyst consensus of $1.76. Furthermore, the company has provided a forward-looking 2026 adjusted EPS target of at least the midpoint of $1.89-$1.91, signaling management's confidence in sustained earnings growth fueled by these secular demand trends.

Key Decisions for Investors

• Investors should view CenterPoint Energy as a direct infrastructure play on the AI-driven electricity demand supercycle, with its $65 billion capital plan providing a clear roadmap for long-term growth.
• The updated guidance serves as a new performance benchmark; monitor the company's ability to meet its raised annual EPS forecast of $1.75-$1.77 and its 2026 target of approximately $1.90 as validation of its growth strategy.
• While the growth narrative is compelling, it is crucial to weigh the execution risks associated with a decade-long, multi-billion dollar capital program, including potential regulatory approvals and the impact of future financing costs.